- Root ( NASDAQ: ROOT ) reported 21% drop in Q2 gross written premiums to $140M while gross earned decreased 5% to $171M; renewal premium as % of gross earned premiums increased to 75% from 71% in Q1 and 59% in year ago quarter.
- In Q2, roughly one-third of Root's new premium volume (31%) came from company's partnership with Carvana.
- The quarter ended with $696M in unencumbered capital, compared with $736M at the end of Q1.
- The company reduced marketing spend 77% to $25.4M in Q2 from year ago quarter while reduced operating cash burn by over $120M.
- Improved operating loss 53% and adj. EBITDA 59% when compared with year ago quarter.
- Q2 gross profit saw a narrow down in loss to $7.5M from $18.9M in prior quarter.
- Looking ahead, the company will continue to execute on its pricing and underwriting improvements through the back half of 2022.
- The company also announced it is proceeding with a 1-for-18 reverse stock split approved by board.
- ROOT is at high risk of performing badly at SA Quant rating system as it has decelerating momentum and inferior profitability when compared to other Financials stocks.
For further details see:
Root sees 21% drop in Q2 gross written premiums, reverse stock split approved